Target expands its 1 percent back loyalty program, Target Circle, to more US markets

Target is expanding access to its new loyalty program that rewards shoppers for returning to its stores by offering 1 percent back on their next trip, among other perks. The program, called Target Circle, is still in beta testing following its initial launch in March of last year. At the time, the program was called Target Red, but the company has since rebranded it. It was also previously available only in the Dallas-Fort Worth area.

Starting today, Target is opening up access to the beta to six other major U.S. markets, including Charlotte, Denver, Indianapolis, Kansas City and Phoenix. This will allow the retailer to test the program on a much larger scale with millions more shoppers.

In addition to the loyalty program’s name, the company also changed the marketing around the program.

Today, Target Circle is more heavily focused on promoting the 1 percent back on purchases — the piece designed to increase foot traffic in Target stores. The 1 percent is meant to lure in those shoppers who won’t sign up for Target’s store card, REDcard. The card, which comes in both a credit and debit version, provides 5 percent back at checkout and has seen decent adoption to date. As of Target’s last quarterly earnings, REDcard penetration was nearly 24 percent.

However, that figure has remained stagnant quarter-over-quarter. It’s not growing at all, and in some cases, even declining slightly. That’s a concern.

Target Circle, then, represents a different way to reach, engage with and reward customers for shopping at Target and getting them to return time and again.

While Target REDcard members can join Circle to receive the other perks, they’ll continue get their 5 percent back instead of earning the 1 percent back, Target notes.

The Target Circle beta website also now touts two other components to the program, including the ability to vote on Target’s local community giving initiatives and a “birthday surprise” feature, which is only one aspect of the program’s larger personalized feature set.

Unlike Cartwheel discounts, which are offered to all shoppers, Target Circle aims to personalize perks to individual consumers. For example, if you shop for baby items all the time, Target will send you a personalized discount for items in that department. You’ll also get a reward of some sort ahead of your birthday.

Retailers have been personalizing their offers without loyalty programs for some time, of course. In fact, Target once famously figured out a teen girl was pregnant before her father did, and sent her coupons for baby items, much to the dad’s chagrin. Now, loyalty program members will opt in to this sort of data collection instead of having to figure out how to opt out. In return, they’ll get deals and discounts they may actually want.

Unmentioned on the rebranded Target Circle website are two other notable rewards which were also available when the program launched: a 50 percent discount on customers’ first-year Shipt membership and free next-day delivery of household essentials through Target Restock.

Target confirmed with TechCrunch these rewards are still included with Target Circle, but said it’s just choosing not to promote them at this time.

The retailer says the expansion of Target Circle to the half-dozen new markets follows the successful test in Dallas-Fort Worth. The program was well-received, it claims, and millions of customer transactions ran through the program since its debut. Target shoppers also directed around $250,000 in local giving.

The company hasn’t spoken much about the program during the testing. In November, it got a brief mention on the earnings call with investors, where Target CFO Catherine Smith (who announced her retirement earlier this year) said the program was seeing “really good sign-up and engagement.”

Customers in the newly added test markets can now join Target Circle by signing up at the website, Target.com/circle, by downloading the Target mobile app or by giving their phone number at checkout.